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Ruchika International, V.K. Agarwal, S.K. Agarwal, M.K. Agarwal, A.J. Ghode, N.N. Borase, C.S. Bolkute Versus Commissioner of Customs, Pune

2015 (7) TMI 850 - CESTAT MUMBAI

Fraudulent claim of undue DEPB benefits - willful mis-statement of FOB value of textile article/fabrics exported - Over Valuation of goods - Penalty imposed on officers for abatement u/s 114 - Held that:- while discarding the value of the goods which have been exported, has relied upon mainly the overseas inquiry conducted, certificate of BTRA and the action of the exporters regarding submitting false BRCs for obtaining DEPB licence, is erroneous for more than one reason - Charts C-1 & C-2 annex .....

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. To that extent, we find that the order seems to have been passed in violation of the principles of natural justice. - No contemporary value on identical or similar goods were brought on record in order to ascertain the contemporaneous prices of the goods sought to be exported. In the absence of above, we find that the impugned order is passed in violation of principles of natural justice and needs reconsideration by the adjudicating authority in respect of M/s. Ruchika International and their .....

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s highlighted in the impugned order was these officers have indicated that they have drawn the samples and maintained the records, but in fact they have not done so; for the charge of abetment - impugned order imposing penalties on these officers under the provisions of Section 114 of the Customs Act, 1962 is unwarranted and unsustainable - Decided in favour of appellants. - Appeal No. C/782, 836 to 839, 843 & 845/09 - Final Order Nos. A/1478-1484/2015-WZB/CB - Dated:- 4-6-2015 - M V Ravindran, .....

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ppeals are as under: S.No. Appeal No. Name of the appellant a) C/839/09 Ruchika International b) C/836/09 V.K. Agarwal c) C/837/09 S.K. Agarwal d) C/838/09 M.K. Agarwal e) C/843/09 A.J. Ghode f) C/845/09 N.N. Borase g) C/782/09 C.S. Bolkute 2. Appeals of Shri. A.J. Ghode, Shri N.N. Borase and Shri C.S. Bolkute are for imposition of penalties on them and they were departmental officers; while Ruchika International is an exporter and Shri V.K. Agarwal, S.K. Agarwal & Shri M.K. Agarwal are part .....

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the description. The samples were tested in the laboratory of Bombay Textile Research Association, Mumbai (BTRA), who vide their report dated 31/07/2006 stated that the PMV of the product was ₹ 96/- per meter and it was noticed by the departmental officers that the FOB value as declared in the shipping bill by the exporter was ₹ 284/- per meter. Thorough investigation was undertaken and the documents relating to the earlier exports made by M/s. Ruchika International were scrutinized .....

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s and also on limitation. The adjudicating authority did not agree with the comments raised and held against M/s. Ruchika International, its partners and also against the three departmental officers. The DEPB credit, which was allowed to the appellant, M/s. Ruchika International was reduced, penalties were imposed on all other appellants as also on M/s. Ruchika International. 4. Ld. Counsel Shri V.P. Jain along with Shri Vishal Agarwal appeared for M/s. Ruchika International and its partners the .....

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e possible ex-factory value; received sale proceeds from non-banking channel, i.e. exchange houses, forged BRC's were submitted to DGFT and purchase invoices of textile articles which is non-existence. It is his submission that all these allegations have been suitably addressed to by the appellant inasmuch as the DEPB, which were claimed were post export and the cancellation of the DEPB licence was not on the ground of over valuation of the goods, the amounts which were received were from M/ .....

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tment as to ascertain whether the goods sought to be exported were technically textile articles or otherwise and the BTRA is not competent to report on the composition of the product sought to be exported. The invoices of the unit manufacturing textile articles is situated in GIDC, the address which was given to the investigating authorities at the beginning itself and it was not investigated. Instead of verifying the said premises, the office premises was verified and the conclusion was drawn t .....

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t was not given to the appellants but two charts C-1 & C-2 (Annexure to page No. 122 of paper book), which was prepared in India by the officers were given. It is his submission that overseas inquiry information cannot be considered as documents in terms of Section 139C of the Customs Act, 1962. It is his submission that the adjudicating authority has neither determined the value inasmuch the adjudicating authority has rejected the value declared by the appellant, but did not determine the v .....

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tion while the appellant had produced an order-in-original dated 21/12/2009 passed by the Commissioner of Customs in an identical issue of very same appellant, M/s. Ruchika International, FOB value of ₹ 270/- per meter was accepted. It is his submission that the said order was not contested by the Revenue. He would then try and show us the similarities in the said order as to the products exported there and the products exported in this case. It is his further submission that the entire sa .....

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ers is incorrect as there is no value, which has been determined to come to a conclusion of quantum of penalites. 4.2 Ld. Counsel appearing on behalf of the departmental officers would draw our attention to the fact that a charge against the appellant is of collusion and connivance with the exporter based on the grounds of allowing clearances of shipping bills without permission from Headquarters, without maintaining of register of records of shipping bill and without drawing samples. It is the .....

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missioner, Pune as appellate authority vide order dated 18/11/2014 dropped all the charges except for non drawing of samples from the export consignments; the charges of allowing exports without permission and/or maintenance records are held unproved by the competent authorities on the basis of facts; hence, these grounds have no place in the current proceedings. They would submit that the CBEC's Circular No. 10/97-Cus dated 17/04/1997 puts no condition of samples drawing and further Customs .....

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nts of the Tribunal in the case of Sunshine Overseas vide Final order No. A/1152-1166/WZB/AHD/2010 dated 16/08/2010, set aside the penalties imposed on the departmental officers. They relied upon the following decisions: a) CC, New Delhi Vs. MI Khan - 2000 (120) ELT 542 (T) b) CC & CE, Hyderabad Vs. Rajiv Kmar Agarwal - 2007 (217) ELT 392 (T) c) GH Industries Vs. CCE, Ahmedabad - 1997 (94) ELT 483 (T) 5. Learned Special Counsel Shri V.K. Singh after giving the overall picture submit that the .....

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sion that even if the documents were lost, records like accounts, etc. were available which were not produced nor were purchase details produced which was available. He would submit that the expert body BTRA has ascertained the value which is based upon the technical expertise cannot be discarded as BTRA is recognized by the Ministry of Textiles. He would then submit that actions of the exporter and their partners are very suspicious inasmuch as they have forged the remittance certificates and g .....

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cating authority, while discarding the value of the goods which have been exported, has relied upon mainly the overseas inquiry conducted, certificate of BTRA and the action of the exporters regarding submitting false BRCs for obtaining DEPB licence, is erroneous for more than one reason. 6.2 Firstly, we find that the Charts C-1 & C-2 annexed to the show-cause notice purportedly supposed to be collated from the overseas inquiry does not have any signature of the officers. It is pertinent to .....

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amples which were drawn by the departmental authorities on the consignments which was intercepted and sent to BTRA, the queries were regarding the technical description of the samples whether they would fall under the category of textile and textile articles; but it seems BTRA had opined that the goods are particular description and additional information as to the correct ex-factory value was also given. At this stage, we have to record that goods sought to be exported were suit length and valu .....

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d was accepted by the department in order-in-original dated 31/12/2009, which we were informed was not contested in the higher judicial forum. This relevant fact is not properly addressed to by the adjudicating authority in correct perspective in the impugned order. 6.4 Thirdly, we also find that no contemporary value on identical or similar goods were brought on record in order to ascertain the contemporaneous prices of the goods sought to be exported. In the absence of above, we find that the .....

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records, we find that there is no abetment on the part of officers inasmuch as all the shipping bills were signed after examining the documents which were attached. The shipping bills and the documents attached and produced before these three departmental officers were indicating the prices, which they felt were correct in the facts of these cases and being recently posted may have lacked in training in clearance of export goods; even otherwise, the only violation which was highlighted in the i .....

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